Cabinet approves 3.78 trillion baht budget for 2026 fiscal year
The Thai Cabinet has sanctioned a 3.78 trillion baht (US$109 billion) budget for the 2026 fiscal year, alongside soft loans to assist small enterprises, as announced by officials yesterday, January 7.
The budget, which includes an 860 billion baht (US$24. billion) deficit, is designed to invigorate the economy, according to Deputy Finance Minister Julapun Amornvivat.
In the previous month, the government anticipated a 0.7% rise in expenditure and a 1% reduction in the deficit for the fiscal year starting on October 1, 2025.
Julapun highlighted that the Ministry of Finance would focus on revenue collection, while the Bank of Thailand is tasked with measures to achieve a 2% headline inflation rate, the central point of its 1% to 3% target range.
Annual headline inflation reached 1.2% in December, marking its return to the target range for the first time in seven months, with an average inflation rate of 0.4% in 2024.
Due to low inflation throughout 2024, the government urged the Bank of Thailand to reduce interest rates to boost economic activity. Consequently, the central bank decreased its benchmark rate to 2.25% in October but maintained it at its subsequent meeting in December.
Julapun also stated that it is vital for the central bank to ensure the competitiveness of the baht, which is currently valued at approximately 34.50 to the US dollar, reported Bangkok Post.
“The BoT must guarantee that the exchange rate is at a suitable level to enable Thai businesses to compete with their partners and rivals.”
In a separate announcement, Deputy Finance Minister Paopoom Rojanasakul disclosed that the Cabinet approved 20 billion baht (US$578 million) in soft loans for small and medium-sized enterprises that lack access to credit. These loans feature a 3% interest rate over three years, as indicated in a statement.
In related news, the government of Thailand announced a borrowing plan of 2.59 trillion baht for the 2025 fiscal year, assuring that this will not hinder the private sector’s fundraising efforts, a Ministry of Finance official stated on September 18 last year.
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